EU leaders to meet on rescue package for Greece

European Union leaders are expected to clear the way for releasing 31.5 billion euro ($41 billion) in urgently-needed financial assistance for debt-stricken Greece at their two-day summit which opens in Brussels today.

After months of speculation about whether Greece will remain in the euro zone, its chances to receive the next instalment from the second 130 billion euro ($168 billion) rescue fund pledged by the EU and the International Monetary Fund (IMF) have improved significantly.

German Finance Minister Wolfgang Schaeuble on Sunday ruled out the possibility of that country leaving the euro zone or becoming bankrupt.

Until now, Germany insisted that the next tranche of the bailout fund, which was due to be paid in June, will be released only after the 'troika' experts of the EU, the IMF and the European Central Bank (ECB) present their report on Greece's compliance with the structural reforms and austerity measures it had promised to its international creditors.

Germany is now seeking the support of its EU partners for the proposal to set up a special account inaccessible to the Greek government to channel the assistance from the EU and the IMF, media reports said.

The proposed account, which will be controlled by EU officials, is intended to make sure that the rescue funds are used to service Greece's debt and to avert a default. The money will not flow into the Greek budget, the reports said.

Most of the euro zone nations are in favour of setting up a special account, according to the report.

Meanwhile, the European Commission announced in Brussels that the 'troika' team ended its work in Athens on Wednesday and reached an agreement with the Greek government on additional reform and austerity programmes.

But, more discussions are needed to sort out some remaining issues, and a final agreement is expected in the coming days, the commission said.